SharkNinja CEO Says Consumers Are Still Getting Value, Even With Higher Prices

Bloomberg

Watch SharkNinja CEO Says Consumers Are Still Getting Value, Even With Higher Prices - Bloomberg on Dailymotion

Transcript

00:00I want to start by saying, you know, this is 10 consecutive quarters of double-digit top and

00:05bottom line growth for Shark Ninja since we've been on the New York Stock Exchange. And our

00:11consumer problem-solving machine was on full display this quarter. I mean, we grew our top

00:16line over 14 percent. We grew the adjusted EBITDA over 21 percent. Our gross margin rate, in fact,

00:23grew 90 basis points in the quarter. And we leveraged our operating expense. So we had a

00:30great quarter. I mean, we've been managing with tariffs now for quite a long time. I mean,

00:35four and a half years now. Well, I mean, that's evident, your great quarter by investor reaction,

00:41right? The shares are up more than 10 percent. So I think everyone understands you did well.

00:46I still would love to hear you quantify the effect of the tariffs on you thus far.

00:54Well, I mean, the tariffs on our gross margin rate this quarter, you know, at a macro level,

01:00didn't have any impact. We grew our gross margins. Now, let's keep in mind our business continues to

01:05grow and diversify outside of the U.S. We're growing our business outside of the U.S. faster than inside

01:12of the U.S. We've diversified nearly all of our supply chain for the U.S. outside of China. We're

01:18making all of that product now for the most part in places like Vietnam and Thailand and Malaysia

01:25and Indonesia. And yes, while there's tariffs there as well, we've done a great job to mitigate a lot of

01:31those through value engineering and cost optimization and product mix. So it's not one silver bullet, Matt,

01:39but like we have to deal with the deck of cards that are handed to us. Yes, there are tariffs and we're doing the best

01:45we can to manage through them. Mark, you held back on across the board price increases, but you've made

01:52some price increases. You talked a little bit about that in previous months. Tell us a little bit about

01:57how that's impacting the consumer. You know, as you raise prices on some of these important products,

02:03how is that impacting sales? Yeah, I mean, we have raised prices and they have been minimal and really

02:10carefully implemented. Look, we're not the highest priced products in the market. We're not the lowest

02:15priced products. When consumers buy a Sharker Ninja product, they're getting great performance, great

02:21quality, but they're also getting it at an extraordinary value. And so even with the price

02:26increases, we've really still maintained that strong value. You could buy a Sharker Ninja product for

02:32$59 for your home. You could buy one for $999 for your home. So, I mean, we're across so many

02:39different price point segments, but it's all about this concept of affordable, accessible

02:44innovation. And I think we've been able to maintain that, Shelley. And tell us about the new factory

02:50you've been talking about, this idea of building a factory in the U.S., bringing some of this

02:54manufacturing back. Which of your products could you actually make in the U.S.? Well, Shelley, we've been

03:01looking at this now, you know, for quite a number of months. And, you know, it's obviously not our

03:06whole assortment, but, you know, we're growing our business in the cooler category, outdoor coolers

03:12called the Ninja Frost Vault. We think that's a product category that could potentially be brought

03:17back to the U.S. We've grown and expanded in outdoor heaters and outdoor grills. We just launched

03:26a product, Shelley, called the Ninja Fireside 360. It's an outdoor heater and fire pit. It has a big

03:32compounded components of steel and aluminum in it. So we're looking at product categories with a lot

03:39of steel and aluminum that doesn't maybe have a lot of, you know, high labor count to it. But coolers,

03:47outdoor products, you know, seem like something over the next few months we could try to nail down.

03:53It's interesting, Mark. I wonder where you're looking at putting a factory, because we've done some

04:00reporting on how much capacity AI data centers have taken up. So if you want construction crews,

04:07if you want someone to lay down cement for you, if you want someone to run on electricity and water for

04:12you, you've got to stand in line behind these big, rich AI data centers. So where are you thinking

04:17about building a factory? And what do you think about that scarcity of capacity?

04:22Well, look, we don't manufacture anything ourselves. I mean, we work with third-party manufacturers.

04:27And so there are a number of third-party manufacturers that are looking aggressively,

04:34you know, areas in the U.S. South. And so we're talking to a number of them. And I think over the

04:39course of the next few months, we'll have that more nailed down. But we won't actually do it

04:44ourselves. We will partner with a third-party company.

04:47All right. So you would have someone else build those products for you. Would you have to raise

04:54prices on the stuff that you build in the U.S.? Because even, I would imagine, roto-molding

04:59a cooler in the U.S. is more expensive than it would be, say, in Indonesia.

05:06Matt, it's a great point. But when you take into account, I think the tariffs, the freight,

05:12you know, the landed cost on the product, you know, we're looking for things that, you know,

05:18we could bring it into a relative parity place and maybe have an advantage on the inventory

05:23management side or working capital or things like that.

05:28Mark, as we're going into this holiday season, it's going to be super competitive. You've talked

05:32a little bit about that in the past. You know, how are you going to protect your margins and also

05:36continue to give those discounts over to consumers that they're expecting for Black Friday and Christmas?

05:42Well, look, Shelley, I mean, that's what we do. I mean, we, you know, we've been in full action

05:48here. I mean, again, I'll go back four and a half years ago when we made our first product outside of

05:53China. I mean, the company has a really proven supply chain model that's been able to drive cost

06:00out of our products as making sure that we're delivering strong value to the consumer.

06:06You know, as you said, I mean, we're obviously watching very carefully the government shutdown.

06:10I mean, we're hoping that, you know, that gets resolved and that consumers, you know, can have

06:15confidence in the government. But we've got some great innovation for the holiday season. I mean,

06:22we've we've innovated in outdoor heaters and fire pits. We've solved the problem of stainxiety

06:28with our shark stain force. We brought at home facial solution that extracts, moisturizes and

06:36de-puffs your skin. I mean, we're having fun here at Shark Ninja and we're developing products and

06:41solving consumer problems in ways that, you know, others aren't.

06:45What's next? What comes after the beauty? You've gone into beauty. You're going into medtech. What's next

06:51that you haven't done yet? You know, listen, we're in 38 different product categories today,

06:57and I think there are lots and lots of places inside the home and outside the home for us to

07:03solve consumer problems. I think there's a lot of things the consumer does outside of the home that

07:08they're not able to do inside of the home. So, you know, I think there's a great roadmap of kind of

07:14what's to come. You are really strong. Some would say geniuses and coming up with these products and

07:22the viral marketing campaigns. I've noticed recently that, you know, if you're using one of

07:28these weight loss drugs, you also need a food scale and a food processor and a protein shake mixer. And

07:35so it makes you buy this whole universe of products. Are there other fads or trends where you see knock-on

07:43effects like that? Well, I mean, we're constantly, I mean, we're scouring social media. I mean,

07:49we're looking at culture. I mean, Matt, look at a product we just came out with called the Ninja

07:53Blend Boss. I mean, it's completely reinventing what you just talked about in terms of at-home

07:59smoothie making, but it's doing it in a really unique and fashionable way. I mean, look at, you know,

08:04we just launched a product actually with a partnership with Tom Brady called the Ninja

08:09Crispy Pro. It's a non-toxic glass air fryer that you could see into with multiple vessels.

08:18So again, I mean, it's just fun, exciting ways for the consumer to be able to cook better for

08:24their families, clean better, feel beautiful, spend more time with each other and make their

08:30homes and outside their homes, you know, just a better environment for them.

Category

Transcript

Be the first to comment

Recommended